Central bank concerned about steady savings decline
A new Bank of Thailand (BOT) report has expressed concern
over the erosion of the country’s savings rate, calling for a national
campaign to reverse the situation.
The central bank’s researchers said that the
country’s savings had been steadily declining over the past decade, posing
a potential threat to both the domestic capital base and growth.
A BOT academic, Kobsak Putrakul, said the overall savings
rate in Thailand hit a peak of 35.2 percent in 1991, falling to 30.5 percent
in 2003.
More worryingly, he said, household savings which peaked
at 14.4 percent in 1989, nose-dived to 3.8 percent in 2003.
Economic policy makers should heed the figures because
domestic savings are critical to capital accumulation and growth while
reducing the nation’s reliance on overseas borrowing, Kobsak said.
While Thailand’s savings rate is still high compared
with other countries, he said this does not mean the country should be
complacent, especially when taking into account the long-term current
account deficit trend.
He said Thailand should make an effort to boost overall
savings rates to 1.8-3.5 percent over the next five years.
Such savings will reinforce the country’s economic
stability by ensuring that there will be enough capital to meet the demand
of domestic investors without too much reliance on external sources.
Nevertheless, Kobsak said that no single policy can deal
with such a complex issue, covering areas such as the pension needs of
low-income earners and the country’s increasingly grey population.
He said people need to be less consumer-oriented, and
taught about the value of savings.
Young people also need to be educated about personal
financial management to enable them to plan their own savings and
investment.
At the same time, the BOT academic said the government
should use the tax systems to encourage contractual savings, such as life
insurance and long-term bonds. (TNA)
Despite energy crunch, Thailand’s petroleum use rises by
5.4% in first half
Thailand’s petroleum use in the first half of this year
increased by 5.4 percent on the average in the first half of this year, with
the use of natural gas jumping by 9.2 percent, according to the country’s
petroleum giant, PTT Public Company Limited (PTT).
Rising consumption continued, despite the world energy
crunch and the increased attention energy use is getting in political and
financial circles.
PTT’s Vice President for Corporate Relations Department
Pongpayak Sathienpakiranakorn disclosed yesterday that the total demand for
petroleum, including fuel and natural gas (except that used in the
petrochemical industry), stood at 1.184 million barrels a day in the
January-June period, an increase of 5.4 percent on average when compared
with the same period last year.
The total demand for fuel alone accounted for 743,900
barrel a day, a 3.3 percent increase from the same period of last year.
This included gasoline usage at 127,300 barrels a day, a
drop of 7 percent; diesel at 362,100 barrels a day, an increase of 9.1
percent, heating oil 108,600 barrels a day, a decrease of 1.5 percent and
aircraft fuel 72,900 barrels a day, a drop of 0.1 percent.
The total demand for natural gas expanded to 440,900
barrels a day, a 9.2 percent increase compared to the same period of 2004,
including that used for power generation (an increase by 19.4 percent) and
natural gas for vehicles (NGV), an increase of 202.4 percent).
The total supply of petroleum, on the other hand, stood
at 1.591 million barrels a day, an average increase of 4 percent over the
same period last year, according to Pongpayak.
Imported supplies accounted for 1.045 million barrels a
day in total, an increase of 2.5 percent on average, while domestic supply
stood at 546,400 barrels a day total, a 7.1 percent increase.
Imported crude oil alone accounted for 845,900 barrels a
day, a drop of 0.2 percent, while imported refined oil stood at 47,800
barrels a day, a decrease of 13 percent, Pongpayak said. (TNA)
Loans continue to grow satisfactorily this year: BOT
Total loans will still expand satisfactorily despite a
slowdown in consumer loans in the second half of this year, according to the
Bank of Thailand (BOT).
Tarisa Watanagase, BOT’s deputy governor in charge of
the Financial Institutions Policy, disclosed yesterday that loans extended
in the country’s financial system had outgrown those in the banking
system.
In the first half of this year, loans extended in the
banking system had grown at a slower pace of 6.4 percent because those
provided to overseas bank branches experienced a negative growth.
“Actually, loans extended by commercial banks to local
entrepreneurs rose up to 11 percent in the first half of the year, while
those in the second quarter have yet to be released,” she said.
“But given the overall money inflow in the economic
system, it is believed that loans will enjoy a two-digit growth. Extended
most are loans for the production and industrial sectors,” she noted.
Tarisa said the central bank had not set a target of how
much total loans are expected to expand.
However, it is satisfactory to see loans grow at a higher
rate than that of the economy.
Whether the loans would continue grow at higher rate in
the future depend on economic conditions, she said.
Tarisa reported that non-performing loans (NPLs) amounted
to around 14 billion baht in the first half of this year, compared with 35
billion in the same period last year and 50 billion in the corresponding
period of 2003, showing a gradual decline. (TNA)
Deposit rates likely to rise
by 0.25% in 4th quarter: KRC
Local deposit rates are likely to edge up by at least 25
basis points in the fourth quarter of this year, followed by an increase in
lending rates by the same level, according to the KASIKORN Research Center
(KRC).
The leading think tank reported yesterday that interest
rates in the local financial system have gradually risen. This appears to be
in conjunction with the Bank of Thailand (BOT) raising the policy interest
rates in August 2004 and some commercial banks raising long-term saving
rates late last year.
Interest rate hike by local commercial banks have also
gained momentum with deposit rates showing a significant turn since July
2005.
Of late, major commercial banks have begun to increase
deposit rates of all categories for corporate customers and to raise 6-month
fixed deposit rates for general clients.
KRC viewed the deposit rate hike, particularly by major
commercial banks, might be caused by their need to curb the outflow of
deposits to small- and medium-sized banks and foreign banks’ branches,
which offered higher deposit rates.
It projected that partial deposits would flow into the
secondary market, where more investors are keen on investment in fixed
income funds.
Other factors that accelerate the interest hike include
the BOT’s concern over higher inflation rates, continued increase in the
policy interest rates, and absorption of liquidity from the financial
institutions system.
In the second half of the year, KRC forecasts that the
interest rate hike by commercial banks will continue to proceed and the
banks will manage to lend out approximately 150-170 billion baht, compared
with 150 billion in the first half of the year.
It is likely that the banks will raise the short-term
deposit rates by 0.25 percent in the final quarter of this year and then
edge up the lending rates by the same level.
Meanwhile, Bangkok Bank Public Company Limited (BBL) said yesterday that
it was considering raising its deposit rates and would announce its decision
soon. (TNA)
US to consider lifting anti dumping penalty on Thai shrimp
The US International Trade Committee (USITC) is
considering lifting Washington’s anti dumping measure against Thai shrimp
exports.
Four representatives of the USITC who visited shrimp
farms in Phang-nga, one of the country’s six southern Andaman provinces
hit by the last December tsunami, promised that they would report damages
and the plight of Thai shrimp breeders and exporters to the authorities
concerned, according to President of the Andaman Shrimp Breeding Association
Taweesap Chuaychantra.
The officials also pledged that the USITC would consider
lifting the anti dumping penalty on Thai shrimp exports, Taweesap disclosed.
“Lifting the anti dumping measure against Thai shrimp
exports will increase Thai shrimp exports to the US market and boost its
prices”, he said.
“We have asked for the USITC assistance by lifting the
anti dumping measures against Thai shrimp exports and they have promised to
review the issue”, he said.
The price of Thai shrimp has steadily dropped since the
anti dumping measure was imposed months ago.
The last December tsunami has worsened the local shrimp
breeding business. (TNA)
PTT enjoys 30% profit surge in 2nd quarter
PTT Public Company Limited (PTT) said yesterday that it
had posted a net profit of more than 18 billion baht, up 30 percent, in the
second quarter of this year, and 36 billion, up 39 percent in the first half
of this year, due to higher energy prices.
PTT’s President Prasert Bunsumpun reported that the
company enjoyed continual revenue and profit growth in the second-quarter
performance of this year.
One of the highlights was a 21 percent increase in the
overall supply of products by the gas separation plant. This is due to the
full-steam operation of plant unit 5, which is the country’s largest. Also
a factor is the rise in revenue of its subsidiary Rayong Refinery Co., in
which PTT has increased its stake from 36 percent to 100 percent.
He said total revenue earned by PTT and its subsidiaries
in the second quarter was 226.29 billion baht, up 50 percent from the same
quarter last year.
EBIDA (earnings before interest, depreciation, and
amortization) was 28.33 billion baht with a net profit of 18.36 billion, or
6.56 baht per share. This is a 30 percent increase from the same quarter the
year before.
Around 56 percent of the profit stemmed from revenue
earned in the petroleum exploration and production, chemical, and refining
businesses, 40 percent from natural gas and 4 percent from the oil business.
In the first half of this year, PTT and its subsidiaries
earned total revenue of 417.45 billion baht, a surge of 45 percent from the
corresponding period last year.
EBIDA was 53.23 billion baht, up 43 percent, and net
profit was 36.61 billion, up 39 percent.
Most of the profits stemmed from earnings of its
subsidiaries.
PTT remains a listed company with the biggest market
capitalization of around 660 billion baht, or 14 percent of the total.
If combined with its subsidiaries, PTT’s market cap is
around 1.2 trillion baht, or 26 percent of the total market capitalization.
At the end of the second quarter, PTT’s total assets
were 480.25 billion baht, with liabilities of 268.65 billion, and
shareholders’ equity of 211.69 billion.
The company’s debt-to-equity ratio is 0.5:1. (TNA)
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